Futures for cocoa, the basic product for chocolate production, fell to the lowest level since 8 August, sparking optimism that the upcoming main harvest will bring more supplies to the world market, meaning that chocolate can be expected to become cheaper in the near future, reports Komersant ukrainskyi
reports with reference to Bloomberg.
Chocolate will become cheaper
Thus, the most active contract in New York fell by as much as 6.2% to $6,819 per tonne, continuing the previous session’s 5.2% drop. Improved weather conditions in West Africa are expected to help partially restore production in the region after a poor harvest this season, which led to record prices and shortages.
“The main crop is developing quite well. There are still a few weeks to go, so we can’t say for sure that the harvest will be good, but all the indicators point to it,”
– said Luca Zaramella, chief financial officer of Mondelez International Inc. the maker of Oreo biscuits and Toblerone chocolate bars. However, he added that he expects further adjustments when the harvest actually becomes available.
Coffee continues to rise in price
As wrote, coffee prices are breaking records, and this rise is only continuing. Robusta coffee futures rose 3.2% to $4,861 a tonne due to low stocks and concerns about production in Vietnam. Traders are also watching the unstable weather in Brazil, where drought has put stress on coffee crops.
According to meteorologist Nadia Pereira of Climatempo, above-average temperatures are expected on Wednesday, but an approaching cold front should bring a sharp change in southern Brazil. Although no significant rainfall is expected in coffee-producing areas such as Minas Gerais, the weather pattern should increase humidity and decrease temperatures.
Market prices
- Cocoa futures fell 5.1% to $6,898 per tonne in New York.
- Robusta coffee rose 3.0% to $4,852 per tonne in London.
- Arabica was slightly down in New York.
John Goodwin, senior commodities analyst at ArrowStream Inc. noted that rainfall in Brazil should improve by the end of the year, and “the level of improvement in states such as Minas Gerais and Espirito Santo is likely to be a major focus for traders.”
Despite the current decline, experts believe that futures are likely to remain above historical levels as other concerns, such as plant diseases, persist. The situation on the cocoa and coffee market continues to evolve, and traders are closely watching each new weather forecast and harvest report.